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Credit
Reading a Credit Report
There are four major areas of content in your credit report:
Identifying
information. This contains your name, phone
number, address, Social Security number and date of birth. It could even
comprise your current and previous employers, and preceding
addresses.
Credit
history . Your credit history is a
synopsis of your credit dealings. This is the heart of a credit report. It
includes your reimbursement history, including any behind schedule
payments to banks, credit card companies, retailers and other lenders.
Other lenders comprise mortgage and auto-finance companies. These details
remain on your credit report for seven years in case they are
negative.
Public
records . If you owe a creditor or tax
agency arrears and do not pay it, you could surely expect to have a public
lien against you. In case you owe property taxes but do not pay, you are
likely to have a lien filed by them through their local property tax
board.
Public records comprise any filings of
personal bankruptcy or court judgments against you. These items remain on
your credit report for seven years, except bankruptcies, which remain on
your credit report for 10 years.
Inquiries. There are
2 types of inquiries: hard and soft. A hard inquiry stays on your credit
report while a soft inquiry does not. Regularly applying for credit,
increases the number of hard inquiries on your credit report. A number of
potential lenders may understand that as a sign of your anxiety for
credit.
A credit report reflects any current credit
that you have. This includes what you owe, amounts obtainable (such as on
a credit card or other form of revolving credit and payment amounts on
installment loans.
Lenders check this area of the credit report as it
provides instant insight into how much credit you may need. It also
reflects how well you pay back your debts and how much your monthly
payments are expected to be if they support your loan request.
The following data is not included in your
credit report:
Deposit information. Deposits are
assets and not a form of debt. Hence even if you consider this as
stability, it is not mentioned in your credit report which centers its
attention on your liabilities.
Credit score. Credit
scores are made based on the contents of a credit report. Nevertheless,
they do not comprise a part of the credit report. The credit bureaus will
sell your credit score for a little fee. While at it, it would be nice
that you attempt to understand credit scores as well.
Race, gender,
ethnicity or national origin. The Equal Credit Opportunity Act forbids the
use of such information so as to avoid any bias in lending
practices.
Business debts. If a debt is personally
guaranteed, a business debt may show up on your personal credit report. In
other cases, it won't.
You need to review your credit report at all three
major credit bureaus. Verify for errors or omissions in any and all three
major reports. Differences between them are nothing that should not be
expected. If you locate an error or note an omission, get in touch with
the credit bureau directly.
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